You could wire an entire house with the colours reversed and it would be perfectly safe to use.
Maybe so but even if an installation was intitally installed with colours reversd but otherwise fine it is very likely that people working on it in the future would end up making it unsafe.
Hi All, simple job I thought, install new double socket. When I take the old one off I find the neutral connected to the live terminal and the live connected to the neutral terminal. Also both the earth wires have been connected to the same terminal when there are 2. Is this safe?
As BAS says the earths are fine.
A live-neutral reverse is bad because it means that fuses, circuit breakers, switches etc will end up in the neutral conductor. In the case of switches this means equipment may remain live when turned off. In the case of fuses and circuit breakers it means that they will leave the appliance live when they blow and that they will not disconnect earth faults. The latter is particually serious if there is no RCD protection.
The most likely explanation is that someone just reversed the connections by mistake. However as bas hints you cannot assume that the resersed connections at this socket don't cancel out (either deliberately or accidently) a mistake elsewhere in the wiring.
Here is what I would suggest:
1: turn off power to the whole installation. At this point you have to treat the installation as suspect and that means you can't rely on single pole devices like MCBs to provide isolation.
2: Wire the new socket and normal with browns/reds to live, blues/blacks to neutral and green/green+yellow to earth and restore power
3: get a socket tester e.g.
http://www.screwfix.com/p/ced-plug-in-socket-tester/76975# and test every socket in the house including the one you just replaced.
4a: if all the sockets show up as fine then it was probablly just one miswired socket. Stop here.
4b: if the replaced socket and most of the other sockets show up as fine but a handful of other sockets show up as live-neutral reversed then that handful of other sockets probablly need their wiring fixing. I would also at this point suggest inspecting the wiring of the consumer unit and any fused connection units since the sloppiness may have extended to more than just sockets.
4c: If the newly replaced socket or a significant number of other sockets show up as live-neutral reversed or the socket tester indicates other faults* then it's time for a thorough inspection, test and fix of the whole installation.
* Be aware that socket testers can sometimes give misleading indications of what the fault is.
